Notably, after preventing drive in theaters from opening (both in Las Vegas AND a one-night showing in Rio Rancho) Gov. Lujan Grisham made a specific point of opening drive in theaters. She also reopened hair salons, barbers, and gyms.

Houses of worship remain at just 25% which seems unnecessarily low, but the biggest issue at this point is that bars and breweries remain completely closed. When those will open is anyone’s guess, but we’ve seen massive growth in the home-grown brewery business and it seems hard to justify their closure at this point (especially since many of them have more plentiful outdoor patio areas than restaurants).

The strict limitation on large groups remains in effect and she is setting herself up for some very controversial and difficult decisions over Balloon Fiesta and the State Fair in the very near future.

Blair Dunn is a hard-charging New Mexico attorney who loves to sue the government (and often wins). He and Paul sit down this week to discuss the legality of the current “lockdown” situation in New Mexico. From whence do politicians (including Gov. Lujan Grisham) derive their powers? What can or should citizens do about it? Additionally, Paul and Blair consider the importance of open and transparent government during this crisis and discuss some of the actions he and the Foundation have taken together to defend open and transparent government in New Mexico.

With so many in person events on hold these days organizations, especially political ones, are working overtime to figure out ways to keep momentum and activism going without meeting in person.

The Los Alamos GOP recently invited RGF president Paul Gessing to present information on New Mexico’s economy and the prospective recovery from the Virus shutdown and oil/gas price decline. You can watch the webinar below. Or, if your group would like to host a similar discussion, contact the Rio Grande Foundation at: info@riograndefoundation.org or 505-264-6090. We can even “host” through our Zoom account!

On this week’s discussion podcast Paul and Wally acknowledge and appreciate the soldiers who have fought for the United States and died in battle. In part due to the relative lack of options this particular holiday, Paul and Wally record the podcast on Memorial Day itself.

As has become tradition in recent months the two offer the latest updates on COVID 19 starting with the fact that New Mexico’s special session is now scheduled for June 18. The Gov. seems to think the State is in great shape due to the existence of a “rainy day fund” totaling about $1.7 billion, but Wally and Paul beg to differ.

Also, an NM In Depth story asserts that public schools may avert deep cuts (at least in the June session). Paul believes the Gov. is waiting until after the November election to make the tough decisions.

New Mexico is among the strictest US states when it comes to being locked down according to a report from Wallethub.

A recent report from the Wall Street Journal argues that the Coronavirus slowdown and drop in oil prices threatens the shale boom for years. Wally is more hopeful.

Finally, in a scary story that has the support of the Gov., New Mexico’s Secretary of Tourism says that New Mexico may potentially not have meetings of 100+ people for a year or 18 months. This would mean the cancellation of many events that make New Mexico so unique including the Balloon Fiesta not just for this year but for two years, not to mention sports, weddings, the State Fair, and many more.

Richardson is a politically savvy guy who has his finger more or less on the pulse of the current political situation.

He recently wrote an opinion piece in the Albuquerque Journal and made some salient points:

While he tries to offer support for Lujan Grisham’s Virus response policies he also criticizes her saying, “leaders need to regionalize some of our response. Southeast and Northeast New Mexico, with far fewer cases, can have their restrictions loosened sooner than Albuquerque, Santa Fe, San Juan and McKinley…And perhaps allow one of my favorite spots, Elephant Butte, which often draws over 100,00 people on a holiday weekend, to allow boating first, then a slow opening of the beaches.”

Continuing on after making several points on a various issues the ex-Gov. writes, “don’t raise taxes of any kind. We need to attract new businesses and, if anything, get rid of the onerous double Social Security tax. ”

At the Rio Grande Foundation we have been circulating a “no tax hike” pledge. Richardson sounds like he’d not only not raise taxes, but with the challenging revenue situation he’s advocating for lower taxes.

Much of the focus in this virus-induced economic downturn has been on Gov. Lujan Grisham and her efforts to slow its spread statewide. It has taken Lujan Grisham a very long time to publicly address the very real economic issues created by her economic shutdown policies and the precipitous drop in oil prices.

As we know by now New Mexico faces unprecedented economic issues with the shortfall totaling $2 billion (or more) out of a $7.6 billion budget.

Critically, while the entire country has been economically impacted by the crisis, New Mexico will see a “double whammy” from the virus and depressed oil prices. Prices have rebounded from a temporary drop below zero, but the industry accounts for 40 percent of the state’s tax revenues. The oil price decline and (likely) slow recovery is going to depress tax revenues statewide — and across all levels of government — for years to come.

We haven’t heard much about how cities and counties will be impacted economically. Cities rely heavily on gross receipts taxes. For example Las Cruces got 76 percent of its 2019-2020 revenue from GRT. Another 12 percent came from property taxes. Santa Fe, a very different city economically, received “just” 28 percent of its revenues from the GRT and 3 percent from property taxes.

County governments rely more heavily on property taxes. Bernalillo County’s budget, for example is 49 percent GRT and 45 percent property tax while Doña Ana gets 32 percent of its budget from GRT and 26 percent from property taxes.

Here are a few points to consider:

Gross receipts taxes are the most volatile tax due to rapid swings in economic activity. Property taxes are more stable because property values change more slowly.

The drop in GRT has been exacerbated during this shutdown because Bill Richardson and the Legislature eliminated taxes on groceries while raising the rate on everything else. Since grocery stores are one of the few businesses open during this crisis, most current economic activity has been untaxed.

GRT-reliant cities/counties (especially those most reliant on GRT like Las Cruces) should be acting right away to address impending downturns.

While there have been some notable exceptions, many local governments in New Mexico appear to have taken a “head-in-the-sand-approach” to the fallout from this economic downturn.

In mid-April right in the middle of the outbreak Bernalillo County passed an absurdly bloated budget with 7 percent growth. Las Cruces and Doña Ana haven’t reacted in any public way so far although the county’s Twitter feed is full of hiring notices (nothing about budget cuts or layoffs). The city of Las Cruces has made no public announcements of budget measures being taken to stem the likely tide of red ink.

Interestingly, Santa Fe, often seen as a bastion of liberalism has already announced a spending freeze that is projected to save some $25 million, but the City faces a deficit of $100 million according to recent reports. Rio Rancho has also shown sensitivity to budgetary reality by furloughing 112 “nonessential” employees, about 15% of the city’s workforce. Reaching beyond New Mexico’s boundaries the city of El Paso has adopted pay cuts for city employees for 12 weeks and furloughs for others.

New Mexico’s local governments are not created equal. Some have big budgets driven by economic growth and relatively wealthy populations; some do not. But tough times are ahead for all due to the virus situation and the massive hit to oil production and tax revenues paid by the industry. Growth is out of question and it is shocking that all local governments haven’t instituted hiring freezes to at least avoid adding to the number of employees that must be paid with dwindling revenues. Cities and counties that are not actively trimming their budgets yet need to be asked “why not?”

A proactive approach to streamlining now will head off far more difficult and painful decisions later. Local governments need to act now.

With traditional theaters largely shut down (at least for a time) nationwide, the remaining drive-in theaters experienced a sudden resurgence. Despite living in Albuquerque when I looked for a drive in theater and found one in Las Vegas, I seriously considered checking it out. As a parent of young kids who have never been to a real drive-in theater I figured it might be fun.

Well, as it turns out the theater attempted to open in mid-May and the Gov. stopped it. There is no scientific or even logical reason for this and it makes an honest observer wonder why she wouldn’t allow this kind of business to reopen.

A second story from the Santa Fe New Mexican includes statements from NM’s Tourism Secretary (with backup from the Gov.) saying that New Mexico may not see events bigger than 100 people for up to 18 months. That could obviously have profound impacts not just on the economy, but on our way of life as well. Weddings, Balloon Fiesta, sports at all levels and more. It is a frightening proposition to say the least.

UPDATE: a “drive in” movie showing that had previously been scheduled by the City of Rio Rancho and had a waiting list of over 90 people who wanted to attend was canceled today as a direct result of the Gov.’s prohibition on drive in movies:

The Rio Grande Foundation has been circulating a pledge for legislative candidates asking them to commit to not raise taxes through the 2021 legislative session. We have had numerous signers, but the following are the ones who are in competitive primary races in their respective parties.

Interestingly, the Senate races are all GOP while the two Democratic Party races are for House seats.

On this week’s podcast interview Paul interviews Deborah Burns of Invest.Us She is involved in venture capital and worked on the New Mexico/China business matchmaking conference a few years ago. So, Paul starts out by asking her for an update on the political and trade situation with China. Then Deborah shares a unique opportunity involving federal stimulus money that New Mexico could work with venture capitalists like hers to bring additional investment to the state in the form of infrastructure.

This is a fascinating, forward-looking, and positive discussion about an innovative opportunity for our state.

Dennis Domrzalski does great old-school reporting. He likes to dig into the data and figure out why New Mexico government is so bloated and inefficient. Much like the Rio Grande Foundation. His latest report here explores the massive overtime pay being given to APD spokesman Simon Drobik.

According to the report Drobik made $82,371 in first four months of this year and is on track to make $247K for year. This is not a new problem as Drobik has been paid massive overtime over the span of the last decade. And, in 2019 the Police Oversight Board called for Drobik’s dismissal due to the overtime situation.

The 2019 “report emphasizes that there was no evidence of criminal activity, it did find that throughout 2018 Drobik violated policies more than 50 times by getting paid simultaneously for being on call as a spokesman and working the ‘chief’s overtime’ at local businesses..”

It is hard to see why the City, through two administrations, would want to continue wasting that kind of money on overtime pay, especially given the looming challenges of recovering from the COVID 19 shutdown.